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December 2016

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The global chemical industry is soon to get greatly affected by the REACH (Registration, Evaluation, Authorization and restriction of Chemicals) regulations of EU which will officially come into force by June 1, 2008. Alongside, the textile, clothing, footwear, toys and all the other industry will also get adversely affected.

In particular, developing countries like China, will be impacted unfavorably and trade relations with EU is likely to get dampened. This is largely because, REACH regulation would accompany expensive inspection which will in turn increase the cost of production for a large number of Chinese Enterprises.

Most concerning, however, is the fact that if the prices of the products increase, Chinese goods will not have a competitive advantage in the European Market. Experts believe that once the REACH regulation comes into operation, the cost of production for Chinese enterprises is most likely to increase by about 5 percent.

Besides, the import cost for foreign products will go up by 6 percent while the average trade between the two countries will decline by nearly 10 percent.